Global endogenous growth and distributional dynamics

Abstract

In this paper we deal with the global distribution of capital and output across time. We supply empirical support to model it as a partial differential equation, if the support of the distribution is related to an initial ranking of the economies. If we consider a distributional extension of the AK model we prove that it displays both global endogenous growth and transitional convergence in a distributional sense. This property can also be shared by a distributional extension of the Ramsey model. We conduct a qualitative analysis of the distributional dynamics and prove that If the technology displays mild decreasing marginal returns we can have long run growth if
a diffusion induced bifurcation is crossed. This means that global growth can exist even in the case in which the local production functions are homogeneous and display decreasing returns to scale.